Rochelle's Daily Wire

Violating a PACA trust does not result in ‘defalcation while acting in a fiduciary capacity’ that makes a debt nondischargeable, Bankruptcy Judge Panos says, taking sides with the Eleventh Circuit.

The Treasury rate and prime rate are both proper starting points for pegging post-petition interest rates, but starting with Treasurys requires a larger risk premium.

Violating a PACA trust does not result in ‘defalcation while acting in a fiduciary capacity’ that makes a debt nondischargeable, the Eleventh Circuit held in upholding Bankruptcy Judge Roberta Colton.

Lower courts are split on whether violating a PACA trust results in a nondischargeable debt. The question is on direct appeal to the Eleventh Circuit.

On an upcoming certified appeal, the Eleventh Circuit can decide whether violating a PACA trust is a ‘defalcation while acting in a fiduciary capacity’ that makes a debt nondischargeable.

The lender’s consent to direct payments by the family farmer persuaded Judge Furay to overrule the chapter 12 trustee’s objection to the plan.

A PACA trust lacks the hallmarks of a trust, so a failure to pay a produce supplier doesn’t give rise to a nondischargeable debt for defalcation while acting in a fiduciary capacity, Judge Goldgar says.

Ninth Circuit reverses its own precedent and eliminates a circuit split by favoring farmers.